| The two main tools for analyzing foreign currency | | | | proven by an analysis of forex prices over the years, |
| price fluctuations are technical analysis and | | | | but by following charts you don't need to do this |
| fundamental analysis. This short article explains in | | | | yourself!) So when you understand how to use forex |
| broad terms what technical analysis is and how you | | | | trading charts, you can learn exactly when to trade |
| can use it in your foreign currency trading. | | | | so that you are most likely to be successful and |
| Forex technical analysis makes use of forex trading | | | | make profits. |
| charts, whose purpose is to identify price trends | | | | Another good thing about using the charts is that |
| accurately. The charts show how the price of a | | | | you can avoid trading with your emotions, which is a |
| specified currency have moved in the past. In other | | | | bad thing. Of course, it's the sudden and often steep |
| words, never mind what caused the price changes, | | | | rises and falls in currency prices that make forex |
| the charts show what the changes were. | | | | trading what it is, but it's hard to keep fear, greed |
| Currency prices react instantly to many different | | | | and other emotions out of it. One of the best pieces |
| factors, and the charts trace what these reactions | | | | of advice in forex trading is not to be constantly |
| have been in the past. | | | | trying for home runs, but instead to go for lots of |
| Stock prices, as well as currency prices, will often | | | | base hits --- they add up. |
| react to world events such as earthquakes or other | | | | Don't panic too soon, and don't celebrate too soon |
| natural disasters or political changes. Sometimes it's | | | | either! You'll have your share of gains and losses, as |
| not the event itself that causes the price | | | | everybody does. |
| fluctuations, but traders' reactions to the events. Just | | | | Learn to use charts correctly, and forex technical |
| remember that the charts don't lie. | | | | analysis will save you from making mistakes and |
| The good thing about forex technical analysis charts | | | | losing money because your emotions took over from |
| is that if you use them well, you can pretty much | | | | your head. |
| ignore any hype or panic attacks taking place in the | | | | The other important tool for forex trading is |
| market. | | | | fundamental analysis. I'll write another article about |
| Analysis of charts over time will show patterns that | | | | that. |
| tend to repeat many times over time. (This can be | | | | |